Duty Free Shops Exempt from GST: License Agreements Outside Customs Frontiers Receive Tax Relief Under Rule 96

The HC allowed three writ petitions related to GST on Duty Free Shop license agreements. The court ruled that Duty Free Shops, located outside India's customs frontiers, are not liable for indirect taxes. The petitioner was granted relief, including a declaration of non-applicability of GST, a refund of collected taxes, and a prohibition on future GST collection, without imposing costs.

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Issues involved:
The issues involved in the judgment are whether Goods and Services Tax (GST) is payable on amounts paid under a License Agreement, the refund of GST levied and collected, and refraining from collecting GST on the same amounts.

Issue 1: Writ of Declaration - GST on amounts paid under License Agreement
The petitioner filed a writ petition seeking a Writ of Declaration, declaring that no Goods and Services Tax (GST) is payable on the amounts paid under a License Agreement dated 05.04.2017. The petitioner, running Duty Free Shops in various Airports, believed that the license fee, akin to rental, was subject to service taxes under relevant sections of the Finance Act, 1994. However, subsequent legal developments clarified that Duty Free Shops, being outside the customs frontiers of India, cannot be burdened with any indirect tax. The Hon'ble Supreme Court's judgment supported this stance, leading to the allowance of the writ petition with no costs.

Issue 2: Writ of Mandamus - Refund of GST levied and collected
Another writ petition was filed seeking a Writ of Mandamus to direct the respondents to refund all Goods and Services Tax (GST) levied and collected on the amounts paid under the License Agreement. The petitioner had initially paid service tax at 15% per month, believing it to be applicable. However, subsequent legal interpretations and the Supreme Court's judgment clarified that Duty Free Shops are not liable for any indirect tax burden. Consequently, the writ petition was allowed, and the Duty Free Shops were deemed entitled to a refund without any technical objections.

Issue 3: Writ of Mandamus - Refrain from collecting GST
The third writ petition aimed to secure a Writ of Mandamus, directing the respondents to refrain from collecting any Goods and Services Tax (GST) on the amounts paid under the License Agreement. The petitioner's case highlighted the erroneous belief regarding the applicability of service taxes and subsequent disputes with the GST Department. The legal clarity provided by the Supreme Court's judgment reinforced the petitioner's position, leading to the allowance of the writ petition without any costs.

This common order by the Madras High Court addressed the intertwined issues raised in three writ petitions concerning the applicability of GST on amounts paid under a License Agreement for Duty Free Shops. The legal developments and the Supreme Court's judgment clarified that Duty Free Shops, being outside the customs frontiers of India, cannot be subjected to any indirect tax burden. As a result, the writ petitions were allowed, and the Duty Free Shops were entitled to refunds of any GST levied and collected, without facing technical objections or limitations.

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